building and running an app is cheap buta successful and profitable company needsGood Monetization Strategyunfortunately most of the monetization techniques that people talk about rely heavily on advertisingAffiliate programsBanner adsBlog advertisingContextual adsInterstitial adsIn-text contextual adsCPA/CPC/CPMPaid Blog PostsLead GenerationRSS adsDataSurveys/Polls
A subscriptions model is where you charge your customers a flat membership fee (often charged weekly, monthly, yearly, or for lifetime) to use your application, services, or content. A pay as you use model is where you charge your customers based on the usage of your application - time, content, resources used, etc. without a fixed flat fee. Amazon Web Services (AWS) is a good and very successful example of Pay only for what you use. A free to use, pay to Services model is where you provide your application for free but charge your customers for services like customization, training, and other value added services. A good example are the companies that provide value added services for the Open Source software (ex. Linux Operating System, Drupal, MySQL, Java, etc.). A freemiummodel is where you give away a basic version of your application for free and charge your customers for an enhanced version of your application that provides more extended feature set or content. There are several good examples of using the freemium model in the industry. Flickr, Skype, Newsgator, Trillian, Google App Engine, etc.. And last but not least the traditional eCommerce model which is usually about selling of products (digital/physical) online through your applications. Obviously we are not talking about selling products at the scale of big retailers (like Amazon & Walmart) out there, but most of the applications could provide ways for it’s customers to buy products (digital or physical) that are related to the application or content or services it is offering. A good example is a social gaming application that could provide merchandise like T-Shirts, Coffee mugs, Photo frames, etc.. with it’s brand name on it. As your application grows it’s audience base and, as it’s brand becomes more known among customers – you can generate revenue based on your brand in this way too. in most cases the monetization model really depends on what your application is providing. Also in some cases it is very important (as your monetization strategy gets more closely bound to the functionality – for example as in the pay as you use model where you would want to keep track of everything the customer is doing) to start thinking about the way you are going to monetize in the future during your application design and implementation phase itself. Otherwise you might be forced to redesign and/or re-implement your application when the times comes to turn the monetization switch on. And when you add different platforms, and devices on which your application is being offered, it would obviously turn into a very costly affair.
Another important aspect of monetization, as you might guess, is the payments platform itself. There are several online payments platforms and solutions available out there in the industry and it becomes vital to choose one that not only provides the payments functionality in the way that you would want but also is economical in terms of the transaction and monthly fees.
Not really – fortunately there are payment platforms out there that hide all the complexities for developers like you and me. PayPal X Payments Platform is one such platform that empowers developers to successfully monetize their applications in many different ways.Consumers, businesses, merchants, sellers, buyers, etc….
Monetizing your ApplicationswithPayPal X Payments Platform Praveen Alavilli Developer Evangelist PayPal X Developer Network @ppalavilli
Agenda Monetization Models A quick overview of Payments PayPal X Payments Platform Adaptive Payments Development Process
As a developer, you select the forms of payments that best fit your application and target the consumer experience.
Credit Cards usage of the card is authorized by the issuer in real time PaymentSystem Acquirer Issuer Consumer Merchant
How the Money moves authorizations are captured immediately and settled in batch PaymentSystem Acquirer Issuer Consumer Merchant
Chargebacks Consumers have the right to chargeback transactions. PaymentSystem Acquirer Issuer Consumer Merchant
Chargebacks Consumers have the right to chargeback transactions. The funds are withdrawn from the merchant’s account and credited to the consumer’s account. PaymentSystem Acquirer Issuer Consumer Merchant
Debit Card differences PaymentSystem With debit cards, processed as a debit card, the authorization transaction and the settlement (capture) transaction are the same. Money movement is in real time. Acquirer Issuer Consumer Merchant
Bank Accounts & ACH PaymentSystem ODFI RDFI Consumer Merchant
PaymentSystem With Automated Clearing House (ACH), there is no authorization transaction. Money movement is batch. ODFI RDFI Consumer Merchant Bank Accounts & ACH
THE ACTORS PayPal The Sender A person or business whose PayPal account is being credited A person or business whose PayPal account is being debited C The Receiver The API CALLER The API access account who makes the Adaptive Payments service calls: may be the sender, one of the receivers, or a third party
SEND MONEY Basic building block allows merchants to transfer money from one entity to another
CHAINED PAYMENTS Instant payment and disbursements Sender sees one payment to primary receiver In one motion, money to secondary receivers sent Supports commission-based payments ₤100 ₤10 ₤40 Sender Visibility Primary ₤50
Funds transfer is serial
Reversal and refund tools available to manage business agreements between receivers